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Eurozone Economic Sentiment

Eurozone: Economic sentiment stabilizes at four-year high in November

November 30, 2015

Following five consecutive increases, Eurozone economic sentiment stabilized in November as lower morale among businesses offset improving consumer confidence. According to the European Commission (EC), the economic sentiment index (ESI) stood at October’s revised 116.1 in November (previously reported: 115.9), remaining at the highest level in four years. The reading also overshot the 115.9 the markets had expected.

Looking at the sectors of the economy, economic sentiment fell in industry and retail trade. Conversely, it improved in services and construction. Moreover, economic sentiment among consumers rose notably over the previous month.

At a country level, an increase in economic sentiment was notable in the Netherlands (+3.1 points), Luxembourg (+2.0 points) and Belgium (+1.8 points). Among the four major Eurozone economies, sentiment fell slightly in Germany (-0.1 points), France (-0.6 points) and Italy (-0.1 points), while it inched up in Spain (+0.2 points).

Met the why particular Consensus Forecast panelists see private consumption growing 1.6% in 2016, which is unchanged from last month’s projection. For 2017, panelists see consumption expanding 1.6%. Panelists expect investment to grow 2.4% in 2016, which is down 0.1 percentage points from last month’s forecast. In 2017, panelists see investment increasing 2.7%.

Author:Ricardo Aceves, Senior Economist

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Note: The Economic Sentiment Indicator (ESI) is based on surveys addressed to the manufacturing, services, retail trade and construction sectors, as well as to consumers. Values above 110 indicate an above-average economic sentiment, whereas values below 110 indicate a below-average position.Source: European Commission